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The new Tax Reform for Acceleration and Inclusion (TRAIN) has resulted to smaller individual income tax but significantly raise the price of some commodities.
It also comes with excise tax for automobiles that will definitely affect the prices of brand new cars.
The bicameral conference consolidated the two different versions of the TRAIN bill's excise tax schedule for automobiles. In short, the law that was signed by President Duterte had four price brackets/tiers and did away with the original system that had a fixed base amount (much like a taxi flag down rate) and an additional tax rate computed on the NMISP in excess of a particular bracket's starting amount.
It's confusing for the non-mathematically inclined, to say the least, which is why the new tiers and systems that came out of the bicameral conference is much better: it only has a rate (in percent) that is applied on the NMISP of a particular vehicle.
4% - up to PhP 600,000
10% - PhP 600,000 up to PhP 1,000,000
20% - over PhP 1,000,000 up to PhP 4,000,000
50% - over PhP 4,000,000
TRAIN also made some specific exemptions to the excise tax such as pure electric vehicles (EVs) and all pick-up trucks. Hybrid electric vehicles will only see 50% of the excise tax rate applied.
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We collated the prices of the two leading car manufacturers in the Philippines both of which are usual choices of car owners, comparing their previous prices with the prices after the implementation of the excise tax under TRAIN.
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